Updated December 27, 2017
New York property owners could get some tax relief from the state following the passage of the sweeping new Republican-backed tax law in Washington.
Last Friday, New York Gov. Andrew Cuomo issued an emergency executive order that would allow homeowners to make partial property tax payments before the end of 2017 and “to help protect property owners in New York from the devastating impact of the GOP tax bill.”
The new federal tax plan that was passed in Congress and signed by President Trump would limit the deductibility of state and local taxes at $10,000, “effectively raising property taxes and reducing home values in New York and in states across the country,” according to an announcement from Cuomo's office.
In response to the new tax plan, Cuomo said in a statement: "As Washington wages an all-out assault on this state and this nation, I have authorized local governments to allow property owners to pay part or all of their taxes early. New York has made unprecedented progress reducing the burden of taxes on our middle-class families, and we will not allow this attack to roll back all that we have achieved. This Executive Order will allow property owners to deduct either part or the full amount of their payment from their federal taxes before the GOP tax bill goes into effect."
Cuomo's executive order would allow local officials to levy taxes so that homeowners to prepay them for 2018 by the end of this year. The order would suspend local laws that prevent taxpayers from making partial payments until the end of 2017. “Since many taxpayers do not yet know the exact amount of their bill, this will allow for a portion of taxes to be paid early and under the current federal tax law,” according to the announcement.
As reported by The New York Times, the new tax legislation has prompted many residents in Greenburgh, New York, to contact their town supervisor inquiring about wanting to prepay their taxes. “It could save us $5,000 or $6,000,” Andrew Eifler, a husband and father in based in Tarrytown, who told the newspaper he plans to prepay a portion of the $21,000 of his annual property taxes.
The Times reported that three counties
in New York--Nassasu, Rockland and Westchester--pay more than $10,000 in median property taxes, says the Tax Foundation, a Washington, D.C.-based tax policy nonprofit group. Moody's Analytics cited that Westchester's home prices could
drop 10.4 percent under the new law. (About 15 of New Jersey's
counties would also be hard hit as well).
In response to impact of the new tax legislation, the IRS said on Wednesday that prepaying 2018 state and local property taxes this year could be tax deductible "under certain circumstances." The agency further said: "Whether a taxpayer is allowed a deduction for the prepayment
of state or local real property taxes in 2017 depends on whether the
taxpayer makes the payment in 2017 and the real property taxes are
assessed prior to 2018." For additional information, click here.
David Chiu is an associate editor at The Cooperator.